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Chapter 6: Procurement 6.1 Introduction

Procurement holds an important role in supporting sustainable development. Purchasing decisions should aim for efficient natural resource use, reduced energy consumption and carbon dioxide emissions, waste minimization, fair and ethical trade, and economic stability. Additionally, institutions benefit from sustainable procurement practices by receiving good value for their money, protecting and enhancing the environment, improving their efficiency of resource use, supporting innovation, creating a diverse and flexible supply chain, and gaining a competitive edge as a leader institution (Environment Agency 2013).

In October 2009, President Obama issued Executive Order 13514: Federal Leadership in Environmental, Energy, and Economic Performance, stating the need for the federal government to lead by example in establishing sustainability as a priority in all of its operations. In response, the Office of Management and Budget created a procurement policy, calling upon all federal agencies to procure federally-designated green products and include sustainability requirements in federal contracts. The policy reinforces that sustainability is an important consideration in the purchase of products and services, asserting that “environmentally responsible acquisition practices are critical to protecting our natural resources” (Office of Management and Budget, 2011).

Following the standards being set by the national government, large institutions such as Chapman University have a great amount of purchasing power that can be used to help support an environmentally sustainable economy. Recognizing this potential can help to stimulate market demand for sustainable products and services (United States Environmental Protection Agency 2012).

The chapter will provide an overview of procurement at Chapman by covering two major objectives: purchasing protocols and purchasing costs. More specifically, it examines the University’s efforts to make sustainable purchasing decisions, as well as resulting monetary spending. This includes purchases for the University associated with:

• Office supplies • Furniture • Cleaning supplies

This chapter will provide anecdotal information as well as quantitative data to reach the two objectives for each type of purchasing listed above.

6.2 History of Procurement at Chapman 6.2.1 Overview

Procurement consists of five main steps, which are examined as they pertain to Chapman in this chapter:

• Supplier selection • Value analysis • Price negotiation

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• Making a purchase • Receipt/use/disposal of products

Universities typically obtain contracts with companies that provide them with price breaks for certain products, and thus, the company becomes the university’s main supplier of those products. For the purposes of this audit, value analysis consists of balancing monetary costs with environmental costs. Price negotiation is based on the price breaks obtained from suppliers for certain items. At Chapman, bidding for these price breaks occurs every 3 years. The most recent bidding process occurred in April 2011. Making a purchase consists of placing the order through a purchase requisition and then a purchase order form, submitted either on paper or electronically. The chapter will cover the use and disposal of the products after they are received as well.

Chapman’s Purchasing Department currently has a policy of representing “the University in the purchase of goods and services at the lowest prices and the best terms and conditions.” The general policy emphasizes monetary cost in purchasing decisions. However, it does not yet mention anything about the environmental costs of the University’s choices.

6.2.2 Past accomplishments Chapman has undergone numerous major changes in the past few years in purchasing

decisions as well as the need to purchase certain items. Recycled Paper

A specific purchasing decision the University has recently altered is its choice of paper. Effective January 1, 2009, Chapman switched from buying virgin paper to paper made from at least 30% post-consumer waste through a policy created by the Faculty Environmental Committee. The change resulted in a cost savings because the recycled paper option actually cost less than the virgin paper. Paper, binders, and folders with recycled content are now the default choices on purchase orders. Inter-Office Electronic Systems

To reduce the over-ordering of paper and resulting waste, the University uses several electronic systems in place of conventional paperwork and filing. For example, The Office of Admissions uses an electronic system called Imagenow, which allows students applying to the University to submit their applications and letters of recommendation electronically. Similarly, The Office of Human Resources has switched from an all-paper to an all-electronic form of job applications and employee benefits system called Open Enrollment. The Calendaring Office, which is responsible for scheduling events as well making facilities and media service requests, has converted to a system called 25Live. This system is completely online and sends confirmation through e-mail. Additionally, Chapman has a portal site for students, faculty, and staff called MyWindow. The site requires a login and provides links to numerous University resources and services, such as links to class registration, applications, and other electronic systems. Inner-Office Electronic Systems

Departments such as the College of Educational Studies, the Dean’s Office in the College of Performing Arts, and the School of Earth and Environmental Sciences have also implemented the use of portals like Sharepoint that allow employees to post documents and share information throughout the department. In addition to simplifying communication, this also decreases the need to use paper for memos and such. Most departments also collect a monthly photocopying report. The College of Educational Studies and the Argyros Schools of Business and Economics use this information to encourage professors to post assignments on Blackboard more instead of handing out and only accepting paper assignments.

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Furniture Reuse Chapman’s Facilities Management collects and stores used furniture from all over campus in

the Villa Park Orchards Association packing house when departments no longer have a need for it. This allows the rest of campus the option of obtaining furniture from this storage space instead of buying new furniture.

6.3 Current Status of Procurement at Chapman 6.3.1 Office Supply Purchases

Office supplies for the University are purchased through Office Solutions, Chapman’s contracted company. The University has a general purchase requisition form (Figure A1) that each department uses to request the order of supplies. This form is sent to Chapman’s Purchasing Department for approval. Products that contain 30% post-consumer waste (binders, paper, and folders) are designated with a green recycling logo on the form. This makes up 22 out of the 113 items, or about 20% of the items, on the purchase order form.

Purchasing office supplies and furniture from Office Solutions for the 2012 calendar year totaled $322,256.61 (Table 6.1). The breakdown of core items and items from recycled content are demonstrated in the tables below. Core items consist of all standard items already included in Chapman’s contract with Office Solutions. Table 6.1. Cost of core and non-core items from Office Solutions for the 2012 calendar year.

Item Type Cost Percent of Total Cost Core Items $109,909.16 34%

Non-Core Items $212,347.45 66% Total $322,256.61 100%

Table 6.2. Cost of core items from Office Solutions for the 2012 calendar year by item content.

Core Items Cost Percent of Total Cost Recycled Content $86,557.83 79%

Non-Recycled Content $23,351.33 21% Total $109,909.16 100%

Table 6.3. Cost of non-core items from Office Solutions for the 2012 calendar year by item content.

The cost of purchased items that are made from recycled content totaled $149,708. The cost of items made from non-recycled content was higher, totaling $172,548. Almost 80% of the cost of core items comes from items of recycled content (Table 6.2), while only about 30% of the money spent on non-core items comes from items of recycled content (Table 6.3). Proportionately, it may be inferred that the core items ordered are more likely to be from recycled content than are the non-core items.

Non-Core Items Cost Percent of Total Cost Recycled Content $63,150.29 30%

Non-Recycled Content $149,197.16 70% Total $212,347.45 100%

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Table 6.1 also reveals that 66% of the University’s purchasing from Office Solutions is of non-core items, meaning that the University spends more on special requests for certain items from Office Solutions than it does on its core items. This is understandable because core items are often default purchases, while non-core items may consist of a special type of furniture, television, etc. 6.3.2 Furniture Purchases

According to Chapman’s Purchasing Department, $24,661 was spent during the 2012 calendar year on furniture from Office Solutions. Another $322,544 was spent on furniture from other vendors.

New furniture is typically purchased for new faculty and staff. When a department’s budget limits them from buying new furniture, Facilities storage is often utilized for furniture. Other departments always utilize the storage to reuse furniture that is still in good standing, unless there is a need for different types of furniture that is not available, such as for an employee’s health and safety. For example, used chairs may be too worn down to be suitable for employees who need extra back support. Any furniture that is not used again by the University is donated to Habitat for Humanity. Typically, this includes furniture that is already in high volume and may not be needed at Chapman. Items such as filing cabinets, desks, partition walls, and dry erase boards, however, are usually in high demand and stored.

The Department of Student and Campus Life as well as the Office of Housing and Residence Life are two departments that always check with Facilities storage before purchasing new furniture. The School of Earth and Environmental Sciences always does the same. The Dean’s Office of Wilkinson College of Humanities and Social Sciences began to utilize this storage much more frequently when in need of new furniture, beginning in 2005. Before replacing furniture, they also check with facilities to see if furniture can be repaired.

Typically, departments go to the storage space, which is a few blocks down from the main campus in the Villa Park Orchards Association packing house, owned by Chapman, to take a look at the furniture available for use. The furniture is then delivered to the specified department. The College of Educational Studies contacts a Facilities employee when they are looking for something specific. Photos of similar furniture held in the storage space are then sent as options to the department as requested. 6.3.3 Campus Survey Analysis

To assess the general knowledge and attitude towards sustainability involving purchasing decisions across campus departments, the 2013 Chapman Environmental Audit Survey was sent to the entire campus community. 344 faculty and staff participated in the survey. Out of these, 155 faculty and staff indicated that they have or share the responsibility of purchasing in their respective department. These faculty and staff answered a variety of questions, whose responses are represented in the graphs below:

Figure 6.1. Cabinets and shelves in Facilities storage.

Figure 6.2. Desks in Facilities storage.

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Table 6.4. Percentage of staff (n=155) in agreement with given statements regarding sustainable procurement. Statement Agree The defaults on purchase orders should be items that are more environmentally-conscious. 73% When given the choice, I use environmentally sustainable products over other products. 71% Chapman University needs a campus-wide sustainable procurement policy. 64% It is important to me that supplies I use in the office are environmentally sustainable. 56%

Table 6.4 assesses the attitudes towards sustainable office supplies. An average of two-thirds

of faculty and staff agreed or strongly agreed with positive attitudes towards the use of sustainable supplies in the office.

The following graphs demonstrate the knowledge and use of sustainable office supplies across the various departments:

70% of faculty and staff said they were aware of some items being designated as

environmentally-conscious in the Office Solutions catalog (Figure 6.3). To follow up, faculty and staff were asked to estimate the percentage of sustainable products purchased. Most faculty and staff are unaware of how many of the items they purchase are designated as environmentally-conscious (Figure 6.4). However, that may have been a result of hesitancy to report an inaccurate percentage.

70%!

30%! Yes!No!

Figure 6.3. Percentage of faculty and staff (n=155) aware of sustainable items in the Office Solutions Catalog.

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Figure 6.4. Percentage of the products purchased through Office Solutions

that are designated as environmentally-conscious.

Approximately 77% of the faculty and staff surveyed said they would be willing to support changing default items to the more sustainable alternatives if the alternatives cost less than or the same as the current items. Additionally, most faculty and staff said they would be willing to pay about 5-10% more for more sustainable office supplies (Figure 6.5). This may suggest willingness to support increased sustainability in procurement practices at Chapman.

Figure 6.5. Percentage of cost increase willing to be paid for more sustainable items.

6.3.3 Cleaning Supplies Custodial service contracts usually last about 5 years. From 2005-2009, Chapman’s custodial services were provided by Diamond Contract Services Inc. As of 2010, Chapman switched to Aramark. Diamond Contract services initially operated on a contracted monthly allocation of $10,387 for consumables

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Figure 6.6. Orbio SC-5000 Water to Cleaning Solution Dispensing System. .

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($8,000 for paper and soap and $2,387 for chemicals). The monthly allocation at the end of the contract is not clear. Aramark currently operates on a contracted monthly allocation of $12,929. This includes disposables, such as soap, paper, toilet paper, and plastic bags. In addition, Aramark spends about $4,500 on cleaning supplies per month, such as floor wax and tools such as mops, brooms, etc. Only about $1,000 is spent on chemicals (Winston, 2013). Although Aramark is spending more on cleaning supplies than Diamond did, it is important to keep in mind that the University has expanded considerably over the last decade.

The current degree of chemical use is a great improvement, given that Aramark’s budget for chemicals is much less than that of Diamond. At Chapman, Aramark operates on “Blue Cleaning,” one of their environmental stewardship programs, which means that they use minimal chemicals (Aramark, 2011). They do this by using Orbio water, which is electrically-activated to clean an area before the Orbio becomes water again that can then be wiped away. There is a machine in the basement of Reeves Hall that Aramark rents for roughly $1200 per month to produce this water.

Additionally, Aramark takes steps to ensure that its employees are implementing proper sustainable practices. These include using more sustainable products instead of conventional cleaning products that seem to be more effective but are actually more environmentally degrading. Cleaning products can also have a significant effect to the health of indoor spaces. Refer to the Building Construction chapter of this audit for more information.

6.4 Concluding Assessment 6.4.1 Areas of progress

Chapman has made significant progress by increasing the number of items made of recycled content in the purchase order forms. The electronic systems that have been implemented are also important areas of growth to the University in terms of reducing paper usage and the need for storage of files. Reusing paper is becoming more common in departments such as the Department of Student and Campus Life, where one printer is filled only with paper that has already been used on one side (Figure 6.7). The University’s recycling efforts, as discussed in Chapter 7, are reducing the need to buy more. The attempt to reuse more furniture reduces purchasing frequency at Chapman. Finally, the initiatives by Aramark to reduce chemical use and provide consistent Blue Cleaning have contributed to improved campus sustainability.

6.4.2 Areas in which to improve Chapman can increase sustainable purchasing choices

by contracting more sustainable items for their purchase order forms with Office Solutions. Given that most spending goes towards non-core items, it is critical to focus on special request purchases as well. When departments must place a special request for items outside of Office Solutions, it is important to make sure that efforts are made to buy more sustainable items and not just the cheapest items in a monetary sense. A central

Figure 6.7. Printers in the Department of Student and Campus Life.

Figure 6.8. Examples of core and non-core office supplies.

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piece of this process is making sure that employees of the University are well aware of their options. It also seems that some departments attain furniture from Facilities storage by physically

visiting the packing house, while others choose from photos of available furniture which are sent to them. To make this easier, it would be a good idea to streamline the process of attaining furniture from Facilities storage to be reused in other departments.

6.4.3 Existing gaps in knowledge This audit attempted to include each college on campus, as well as a few major departments,

to get a general sense of procurement practices. Due to the unique structure of each department, there is no specific person who oversees procurement information in each college. Purchasing decisions go through various faculty and staff, as well as student employees. Additionally, not all cost information from orders is readily available, such as the breakdown for cleaning supplies from Aramark. More detailed records of purchases in each department can help the Purchasing Department in maintaining records of what exactly the University is ordering. With this knowledge, Chapman can better assess its spending and keep track of any improvements regarding sustainable procurement. Because this is the first time this type of environmental audit has been conducted at Chapman, there is much more to explore at great length regarding procurement.

6.5 Recommendations 6.5.1 Low cost/effort

• Each college and department on campus should track their costs and ordering frequency of all items, especially environmentally-conscious items, in a detailed manner. This should be done on an annual basis in order to assess each department’s improvements in sustainability.

6.5.2 Moderate cost/effort • A sustainable procurement policy: Some universities, such as Clemson University, have

implemented a sustainable procurement policy which states that they will purchase more sustainable items when reasonable, and recognize the impact of their everyday purchasing decisions for a large institution on the environment (Clemson University Procurement Services). 64% of Chapman faculty and staff that participated in the 2013 Chapman Environmental Audit Survey agreed that Chapman needs to develop and implement a sustainable procurement policy. Clemson University’s policy and the federal procurement policy outlined in the introduction of this chapter can serve as great starting points for developing a procurement policy for Chapman.

• An electronic system of Office Solutions purchase requisition forms: the current system uses paper forms that are sent to the Purchasing Department for order requests. An electronic system would help to alleviate excessive paper and the need for filing storage.

6.5.3 High cost/effort • Increase the number of items coming from recycled content on the purchase order from Office

Solutions from 20% to 30%. This can be done by replacing the current standard paper pads, post-it notes, and envelopes with ones that come from post-consumer waste content. Although the current costs for the more sustainable items are higher than the standard items, price breaks for these items should be pursued with Office Solutions during the next bidding process.

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• A 5-8% threshold increase for purchasing sustainable items: A majority of Chapman faculty

and staff said that they would be willing to pay an increase of 5-10% more for sustainable items. If budgets allow, this would be a big step in increasing the number of contracted items on the Office Solutions purchase order forms.

• Streamline the process for attaining furniture from Facilities Storage to increase the utilization of it among departments. An increase in the amount of departments that attain furniture from Facilities can be made. It may help to maintain an online photo database of available furniture so that people will not be required to physically visit the storage space.

6.5.4 Future areas of research Other ideas for future research, which did not fit the scope of this audit, but would be of interest

in future audits, include a more in-depth breakdown of spending for specific items and their alternatives. Although it was determined that all computers and printers purchased for Chapman are ENERGY STAR efficient, more in-depth information about cost and use of these items should be considered.

Further ideas include purchasing in regards to sports team athletic wear and equipment, uniforms for departments such as Housing and Residence Life and Student and Campus Life, and clothing for clubs and organizations on campus since they come mostly from the Student Government Association budget. Fair and ethical trade is another important topic when it comes to sustainable procurement. Research in this area would increase the comprehensiveness of this chapter. It is important to keep in mind and assess all three facets of sustainability: environmental, economic, and social.

6.6 Contacts Mackenzie Crigger, Energy Conservation and Sustainability Manager, Facilities Management, Chapman University (crigger@chapman.edu, 714-997-6658 ext. 7370) Pam Ames, Director of Purchasing, Purchasing Department, Chapman University (ames@chapman.edu, 714-997-6712) Cindy Graves, Department Business Manager, Facilities Management, Chapman University (cgraves@chapman.edu, 714-997-6658 ext. 6575) Regan Winston, Director of Custodial Services, Aramark (Winston-Regan@aramark.com, 714-628-2677) Kathy Arballo, Operations Manager, College of Educational Studies, Chapman University (arballo@chapman.edu, 714-744-7883) Barbara Piscitelli, Administrative Director, Wilkinson College of Humanities and Social Sciences, Chapman University (piscitel@chapman.edu, 714-997-6678) Jillian Ryan, Administrative Operations Coordinator, Argyros School of Business and Economics, Chapman University (jryan@chapman.edu, 714-289-2026)

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Joann King, Assistant to the Dean in Operations, College of Performing Arts, Chapman University (jking@chapman.edu, 714-744-7001) Sora Kim, Department Assistant, Dodge College of Film and Media Arts, Chapman University (sorakim@chapman.edu, 714-744-7910) Brad Agrums, Assistant to the Associate Dean, School of Earth and Environmental Sciences, Schmid College of Science and Technology, Chapman University (agrums@chapman.edu, 714-628-7230) Justin Koppelman, Civic Engagement Coordinator, Department of Student and Campus Life, Chapman University (jkoppel@chapman.edu, 714-997-6894) Leti Wyatt, Assistant Director, Department of Housing and Residence Life, Chapman University (lwyatt@chapman.edu, 714-532-6056) (Winston, 2013)

6.7 References Aramark. (2011). Protecting the Earth's Resources for Future Generations. Retrieved from Aramark Higher Education: http://www.aramarkhighered.com/social-responsibility/environment.aspx Clemson University Procurement Services. (2013). Procurement. Retrieved from Clemson University: http://www.clemson.edu/cfo/procurement/policies/spp.html Environment Agency. (2013). Sustainable Procurement. Retrieved from Environment Agency: http://www.environment-agency.gov.uk/aboutus/procurement/35590.aspx Diamond Contract Services. (2010). Green Cleaning. Retrieved from Diamond Contract Services, Inc.: http://www.diamondcontract.com/green-cleaning.php Office of Management and Budget. (2011, October 5). Memorandum for Chief Acuquisition Officers, Senior Officials, and Small Agency Council Members. Retrieved 2013, from The White House: http://www.whitehouse.gov/sites/default/files/omb/assets/procurement_green/improving-sustainable-acquisition-and-reporting.pdf Solomon, C. (2011). A Business Case for Sustainable Procurement of Office Supply Commodities at West Virginia University. Retrieved from AASHE: http://www.aashe.org/resources/conference/business-case-sustainable-procurement-office-supply-commodities-west-virginia U.S. Environmental Protection Agency. (2012). Environmentally Preferable Purchasing. Retrieved from United States Environmental Protection Agency: http://www.epa.gov/epp/ Winston, R. (2013, April 9). Director of Custodial Services.

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6.8 Appendix

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Figure A1. Office Solutions purchase requisition form used by colleges/departments to request the purchasing of office supplies. This form is sent to the Purchasing Department for approval.